Getting rural insurance right

It is important that farmers get the right insurance cover to protect both them and their business.

Farming is the lifeblood of New Zealand's economy, which is why it’s so important that farmers get the right insurance cover to protect both them and their business.

But with so much media focus on the insurance industry, the average Kiwi farmer could be forgiven for thinking that choosing the right farm insurance policy is a tough and daunting task.

The process of choosing the right rural cover can be broken down into three easy steps.

1. Identify your rural insurance needs

While it’s true that insurance contracts are technical and detailed, there are some very simple principles behind identifying commercial insurance needs.

To begin with, a farmer, like any other insurance consumer, needs to address some basic questions, namely: what do I have to insure? Are these physical assets that exist on the farm, for example, a house, a barn, a building or a tractor?

Next, think about what could happen to these assets. Could they burn? Could there be a flood? Or could something else happen to them? Challenge yourself as to whether you can protect your assets with your own actions, for example, carrying a fire extinguisher in the cab of the tractor.

Lastly, consider whether the assets are valuable enough that the best way to protect them would be to transfer the financial risk to an insurance company. If your answer is yes, then these are the assets you need to buy insurance for.

2. Choose the right insurance product

Having decided you need to get farm insurance, the next question to answer is which kind. There are many products in the market for the farmer. The majority of farmers most commonly purchase the following cover:

Material Damage – this covers physical assets. For example, your barn, dairy shed, tools and equipment. This policy might also be called a Business Assets policy.

Commercial Motor Vehicle – this covers working vehicles. For your average farmer, this means tractors, quad bikes, and the farm ute.

Legal Liability – this covers the farmer for property damage or personal injury arising from their day-to-day farm work.

There are a number of other policies available to cover agricultural needs. Some farmers will need machinery breakdown cover, others will need to protect their livestock. Some will need income protection insurance, others won’t. Deciding what to buy and what not to buy is up to individual farmers, but advice from insurance professionals at Cartwrights will help.

3. Buy your farm insurance

Once you know what your farm insurance needs are, your next step is to purchase cover.

Cartwrights is able to offer farmers with different needs various ways to buy their insurance. For large commercial farming ventures with potentially millions of dollars worth of assets, detailed advice from a specialist insurance advisor at Cartwrights is probably the best option.

Regardless of the size of your farm, getting good advice is vital to helping you find rural insurance that meets your needs.